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Sri Lanka expects tourism industry recovery to solve BOP troubles

Sri Lanka’s recovering tourism sector will help end the balance of payments troubles, Central Bank Governor Nivard Cabraal said, echoing statements made by ministers.

“When the pandemic is in the world for around two years there will be a pressure for the country. With the pandemic, the tourism sector is also under pressure,” Governor Cabraal said.

However tourism industry is heading for booming recovery with record number of tourist arrivals exceeding 31600 to Sri Lanka  posted in the first 11 days of 2022, Tourism Ministry said .

He said, in 2021, even though the foreign reserves had five billion US dollars, Sri Lanka was able to pay six billion US dollars in debt, and save three billion US dollars as well.

Cabraal said, with the tourism sector under pressure the country is not getting an income of nine billion US dollars.

“We are doing all this while we are lacking that income at the moment. What I see is not having patience,” he said.

“In another two-three months, the tourism sector will develop further. When that happens, the pressure we have will reduce.”

Economic analysts using classical principles however have warned that tourism fall is not the reason for currency troubles but liquidity injections.

Tourism receipts are owned by the people who earn the money and the government does not own it.Tourist arrivals to Sri Lanka have exceeded 31,600 in the first 11 days of 2022, despite the challenges emanating from the global COVID pandemic and reinforcing the industry’s optimism. From 1 to 11 January, Sri Lanka received a record 31, 688 tourists, a significant rebound from 2021. 

Sri Lanka Tourism Development Authority (SLTDA) said during the first 11 days the highest number of tourist arrivals was from the Russian Federation – 5,726.

In addition, tourists have also arrived from India – 5,566, Ukraine – 3,028, UK – 2,370, Germany – 2,046, Maldives – 1,269, France – 1,241, Australia – 1,093, Poland – 771 and US – 662.

However, future trend of tourism remains uncertain amidst the evolving nature of the pandemic and other correlated variables such as vaccination rates and efforts in curtailing the pandemic.

“It is great to see the tourism is beginning to rebound amidst concerns on highly infectious COVID variant Omicron. The collective effort of all citizens contributed to the successful recovery of the industry,” Sri Lanka Tourism Chairperson Kimarli Fernando told journalists yesterday. 

Speaking at a discussion titled ‘Tourism Resumes’ organised by Presidential Media Centre (PMC) she said Sri Lanka needs to ‘ride with the tide’ to sustain the industry despite the challenges emanating from the COVID pandemic.

Fernando said they were also concerned about the continuity of the current arrival trends, given the global spike in COVID cases.

“We saw several cancellations particularly from European countries and India following resurgence of COVID Omicron variant. Certain countries have imposed restrictions already, these are inevitable in a pandemic situation,” Fernando said.

With partial reopening in January 2021 which saw 1,682 tourists, arrivals have been on the rise in tandem with the vaccination rollout, improved health and safety precautions, and easing of travel restrictions.

SLTDA Director General Dhammika Wijayasingha said that the majority of incoming tourists stay for 14 or more days on an average, from the previous 7 to 10 days.

“Post-pandemic we saw a lot of tourists coming to Sri Lanka for wellness tourism and vacation with family. These tourists stay longer than the usual, which extends to minimum 14 or more days. It’s a great trend that we hope would continue from long-haul travellers,” she added. 

Given the challenges they encounter to reach final destination amidst health protocols, Wijayasingha pointed out that the travellers under new normal will want to explore the long haul countries to the fullest.

Since mid-2021, Sri Lanka Tourism Promotion Bureau (SLTPB) rolled out promotions in several countries, including Russia, France, Germany and the UK. The inflow of tourists has been boosted by increased connectivity as well by international airlines.

National carrier SriLankan Airlines also launched direct flights to Russia and France after a lapse of six years.

In November, four international airlines resumed operations to Colombo, these include France flag carrier – Air France, Swiss leisure airline – Edelweiss, Russia’s flag carrier – Aeroflot and Tata-SIA joint venture – Vistara Airlines.

In addition, Russia’s Azur Airlines and Kazakhstan’s Air Astana commenced direct flights to Sri Lanka, while popular European airlines Poland’s flag carrier Lot Polish Airlines and Italy’s Neos Airlines commenced operations from December 2021.

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